Your take on layaway

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities

Your take on layaway

Postby mojave » Sat Jul 27, 2013 3:07 pm

A commercial for KMart's free layaway program just came on and I commented to my husband that this new increase in layaway programs highlights America's problem with spending and consumption. I feel that if you can't afford to pay for $200 worth of clothes right then and there then you should be going to thrift stores to get your clothes or not buy any at all (this is assuming you don't "need" new clothes, either way I still say go thrifting). I feel even more strongly about this around the Christmas season - if you can't afford to spoil your kids on Christmas then don't.

He feels that if it's free and you're not paying interest and you can pay less over a few months instead of dropping $200 at once, then it is not a bad thing and could be a good thing depending.

I retorted with "consider the customer base", most likely lower-income families that don't have the funds for any kind of consumption.

What are your thoughts on layaway? Yea or nay?
User avatar
mojave
 
Posts: 251
Joined: Mon Aug 20, 2012 9:59 am

Re: Your take on layaway

Postby livesoft » Sat Jul 27, 2013 3:09 pm

When school starts and the kids need clothes and you got no money, no checking account, no credit cards, then it might not be a bad idea. Also, the thrift stores in poorer neighborhoods don't have the same selection as thrift stores in 90210 and the like.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
livesoft
 
Posts: 32467
Joined: Thu Mar 01, 2007 9:00 pm

Re: Your take on layaway

Postby Mudpuppy » Sat Jul 27, 2013 3:17 pm

But it's not free at many places. Most layaway programs have a fee you have to pay. There might be no interest after that fee, but the fee itself can often times be a significant percentage of the purchase price, particularly on small layaway purchases. For example, Walmart's holiday shopping 2012 layaway plan had a $15 fee to open a Walmart layaway account. It allowed you to put as little as $50 on layaway. $15 is 30% of $50. You only got that fee back if you completed the payment plan, and then only as a Walmart gift card, so Walmart got to keep the money one way or another.

Here's an article detailing the "gotchas" of layaway that was published for the holiday 2012 shopping season: http://www.mcclatchydc.com/2012/09/10/1 ... sumer.html
Mudpuppy
 
Posts: 2500
Joined: Sat Aug 27, 2011 3:26 am
Location: Sunny California

Re: Your take on layaway

Postby awval999 » Sat Jul 27, 2013 3:18 pm

I mean--- for the posters on this forum it is unimaginable to not have $200 cash (or the rewards credit card) to pay it in cash (or pay off the bill in full at the end of the month), but there are families and such that do not have that sort of financial assets. I mean how in the world are cash advance places in business???? It is what it is.
awval999
 
Posts: 635
Joined: Fri Apr 08, 2011 11:17 pm

Re: Your take on layaway

Postby Epsilon Delta » Sat Jul 27, 2013 3:23 pm

“Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well- warmed, and well-fed.”
― Herman Melville
User avatar
Epsilon Delta
 
Posts: 3263
Joined: Thu Apr 28, 2011 8:00 pm

Re: Your take on layaway

Postby nisiprius » Sat Jul 27, 2013 3:34 pm

As things go, I don't see much harm in it. The poisonous thing about credit cards is the instant gratification. A layaway plan feels more like thrift, because the enforced savings happens up front. I haven't checked the details of today's layaway plans.

Well, let's see: KMart Layaway Policy
A Layaway contract is eight (8) weeks.
• The Service Fee on all new Layaway contracts is $5.
• The Cancellation Fee on all new Layaway contracts is $10.
• The Service Fee plus Cancellation Fee, or 10% down payment (whichever is
greater) is collected when merchandise is put into Layaway
• The bi-weekly payment schedule for all new Layaway contracts is 25% of the original
balance due.
• As long as the payments are made on time, the merchandise will be held for you.
• Layaway merchandise will be returned to stock seven (7) days after a missed payment. • If Layaway merchandise is returned to stock, you are eligible for a refund minus
Service and Cancellation Fees for a one year period.
That doesn't sound too predatory to me. If you buy something you can't afford and discover you can't make the payments, it's a pretty mild ding. If it turns out that the business model is to pressure people into overcommitting in order to collect cancellation fees, then shame on them, but I don't think so, because I think it's probably a considerable nuisance to a store to get saddled with unsold inventory they thought they'd sold, even if they get a 10% or $10 fee out of it.

And unlike revolving credit, there's no obvious way to ramp the commitment up and up and up until all your income is going to meet finance charges. It's not as if you could re-up the layaway contract at the end.

When my son was maybe eight, nine, ten, there was a toy store in town that allowed kids to buy toys on layaway. We thought it was sort of OK precisely because it was a kind of motivated enforced savings. There was no extra fee other than, of course, the fairly high retail markup as this was no discount store. Once, our son was quite disappointed when a toy he bought on layaway and made payments for for months didn't live up to the ad. I encouraged him to bring it back to the toy store and explain exactly why it was different from the commercial and the store took it back and gave him a refund. I thought it was all a mild first education in thrift, savings, contracts, and retail-store/customer relationships.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
nisiprius
Advisory Board
 
Posts: 24786
Joined: Thu Jul 26, 2007 10:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Your take on layaway

Postby JoMoney » Sat Jul 27, 2013 3:41 pm

I would consider layaway a better option then buying on credit. But most people would be better off saving up seperately and then making the purchase. What happens if there is a sale somewhere else while you're still paying on the layaway?

For the "un-banked" in our country they may not have a lot of options. I would be curious to see what sort of gotchas and fees are associated with the layaway plans. It seems all too often these alternative methods are being used to charge huge fees to the people who can least afford it.
User avatar
JoMoney
 
Posts: 1252
Joined: Tue Jul 23, 2013 6:31 am

Re: Your take on layaway

Postby Mudpuppy » Sat Jul 27, 2013 3:47 pm

JoMoney wrote:I would consider layaway a better option then buying on credit. But most people would be better off saving up seperately and then making the purchase. What happens if there is a sale somewhere else while you're still paying on the layaway?

For the "un-banked" in our country they may not have a lot of options. I would be curious to see what sort of gotchas and fees are associated with the layaway plans. It seems all too often these alternative methods are being used to charge huge fees to the people who can least afford it.

This is exactly my concerns with most layaway plans. It feels predatory. Not as predatory as payday loans or similar loan sharks, but still predatory. And it's almost like socially acceptable predatory behavior, although that may just be because people aren't aware how often the "gotchas" get people who put things on layaway.

For example, unless things have changed recently, a late payment is usually treated the same as a cancellation. So if you get that last payment in 2 days late because you had to take your little pumpkin to the clinic and pay for some medication and didn't have the money until the next payday, oops, sorry. And the likelihood of something like that happening with the un-banked is very high, because they don't have emergency funds and are living paycheck-to-paycheck. As the article I quoted said, for many, shoving the money under a mattress every two weeks for 60 days, then going to the store and buying the item outright would be fiscally better, if they don't have an event that causes them to raid the money under the mattress that is.
Mudpuppy
 
Posts: 2500
Joined: Sat Aug 27, 2011 3:26 am
Location: Sunny California

Re: Your take on layaway

Postby nisiprius » Sat Jul 27, 2013 3:53 pm

Mudpuppy wrote:...And the likelihood of something like that happening with the un-banked is very high, because they don't have emergency funds and are living paycheck-to-paycheck. As the article I quoted said, for many, shoving the money under a mattress every two weeks for 60 days, then going to the store and buying the item outright would be fiscally better, if they don't have an event that causes them to raid the money under the mattress that is.
Tell us more. Are there statistics and percentages behind that, or, at least press reports and personal knowledge... or is it just your surmise?

Google News: "Your search - predatory layaway - did not match any news results."
Google News: "Your search - layaway criticism - did not match any news results."

I'm not a big social darwinist, caveat emptor, let 'em vote with their dollars guy but ... convince me there's a problem here.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
nisiprius
Advisory Board
 
Posts: 24786
Joined: Thu Jul 26, 2007 10:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Your take on layaway

Postby mojave » Sat Jul 27, 2013 4:05 pm

Epsilon Delta wrote:“Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well- warmed, and well-fed.”
― Herman Melville


I'm far from being "comfortable" with our finances. We do not have much at all. I buy all of my clothes at Goodwill.


ETA the above is why I am here.
User avatar
mojave
 
Posts: 251
Joined: Mon Aug 20, 2012 9:59 am

Re: Your take on layaway

Postby Mudpuppy » Sat Jul 27, 2013 4:19 pm

nisiprius wrote:
Mudpuppy wrote:...And the likelihood of something like that happening with the un-banked is very high, because they don't have emergency funds and are living paycheck-to-paycheck. As the article I quoted said, for many, shoving the money under a mattress every two weeks for 60 days, then going to the store and buying the item outright would be fiscally better, if they don't have an event that causes them to raid the money under the mattress that is.
Tell us more. Are there statistics and percentages behind that, or, at least press reports and personal knowledge... or is it just your surmise?

Google News: "Your search - predatory layaway - did not match any news results."
Google News: "Your search - layaway criticism - did not match any news results."

I'm not a big social darwinist, caveat emptor, let 'em vote with their dollars guy but ... convince me there's a problem here.

Not to be redundant, but the first result for a general Google search on layaway criticism is what I already posted: http://www.mcclatchydc.com/2012/09/10/1 ... sumer.html

You're not going to find anything searching Google News because it only looks a couple months back. These sort of articles don't come out until the holiday shopping season, which is a couple of months away (attempts at Black Friday in July by retailers not withstanding).
Mudpuppy
 
Posts: 2500
Joined: Sat Aug 27, 2011 3:26 am
Location: Sunny California

Re: Your take on layaway

Postby Abe » Sat Jul 27, 2013 4:24 pm

Layaway is not predatory anymore than any other type of credit offered to customers. A lot of poor people could not buy their childrens Christmas presents or buy school clothes if it were not for lawaway. I think some here have not been around very many really poor people. This is what they have to do to survive. Walmart quit doing layaway during the Holidays for a while, but they had to start back because demand was so high and their competitors were doing it. It's actually a lot of trouble for stores to do it. They don't have room to store the merchandise and it's a headache keeping up with a lot of little transactions.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby JoMoney » Sat Jul 27, 2013 4:25 pm

nisiprius wrote:Tell us more. Are there statistics and percentages behind that, or, at least press reports and personal knowledge... or is it just your surmise?

Google News: "Your search - predatory layaway - did not match any news results."
Google News: "Your search - layaway criticism - did not match any news results."

I'm not a big social darwinist, caveat emptor, let 'em vote with their dollars guy but ... convince me there's a problem here.


Do a regular google search and you'll find multiple critics.. maybe if it's not put out by Reuters or AP, "google news" isn't indexing it ..???...
http://www.nytimes.com/2011/10/12/opini ... -plan.html
http://www.interest.com/debt/advice/lay ... ory-loans/
http://thewirehead.wordpress.com/2011/1 ... away-hell/
User avatar
JoMoney
 
Posts: 1252
Joined: Tue Jul 23, 2013 6:31 am

Re: Your take on layaway

Postby Abe » Sat Jul 27, 2013 4:36 pm

JoMoney wrote:
nisiprius wrote:Tell us more. Are there statistics and percentages behind that, or, at least press reports and personal knowledge... or is it just your surmise?

Google News: "Your search - predatory layaway - did not match any news results."
Google News: "Your search - layaway criticism - did not match any news results."

I'm not a big social darwinist, caveat emptor, let 'em vote with their dollars guy but ... convince me there's a problem here.


Do a regular google search and you'll find multiple critics.. maybe if it's not put out by Reuters or AP, "google news" isn't indexing it ..???...
http://www.nytimes.com/2011/10/12/opini ... -plan.html
http://www.interest.com/debt/advice/lay ... ory-loans/
http://thewirehead.wordpress.com/2011/1 ... away-hell/


The Cornell professor Louis Hyman who had the op-ed in the New York Times has got it all figured out. The only problem is he has never been there and done that. The fact of the matter is that layaway works for poor people. It's their only choice. Most stores don't even want to do it. It's a lot of trouble for them.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby Abe » Sat Jul 27, 2013 4:44 pm

frugaltype wrote:
M_to_the_G wrote:I have a negative psychological reaction to layaway. When I was a kid, they made fun of families that used that service. It still seems cheesy to me today as I can't think of a single reason why anybody would do it unless it was to buy something they can't actually afford, right?


I didn't know layaway still existed. My family used it growing up for things like a winter coat. I am not sure why my parents didn't save instead. Perhaps it was a way of saving. They were not using it for luxuries.


Years ago, layaway was fairly common. A lot of people used layaway. Now, more people have credit cards. I don't see anything wrong with layaway. It's a service that's good for some people.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby Abe » Sat Jul 27, 2013 5:07 pm

JoMoney wrote:I would consider layaway a better option then buying on credit. But most people would be better off saving up seperately and then making the purchase. What happens if there is a sale somewhere else while you're still paying on the layaway?

For the "un-banked" in our country they may not have a lot of options. I would be curious to see what sort of gotchas and fees are associated with the layaway plans. It seems all too often these alternative methods are being used to charge huge fees to the people who can least afford it.


If a customer puts an item in layaway and it goes on sale later at a cheaper price, Walmart will let them have it for the sale price even though it was higher when they put it in layaway. Walmart will also match any competitors price.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby Mudpuppy » Sat Jul 27, 2013 5:35 pm

Abe wrote:The Cornell professor Louis Hyman who had the op-ed in the New York Times has got it all figured out. The only problem is he has never been there and done that. The fact of the matter is that layaway works for poor people. It's their only choice. Most stores don't even want to do it. It's a lot of trouble for them.

I have been there. I have done that. I can't count the number of hot dogs I ate as a kid because it was the cheapest meat my parents could buy and they only had a couple of bucks to last a week until payday. Or the number of government cheese blocks we had. Not to mention the MREs my father's reserve unit would let him bring home (although the old chocolate covered cookie bars were delicious). I think I ate more MRE crackers, peanut butter and cheese as snack when I was a kid than the "real" stuff.

So yeah, I have been there. And it makes me particularly sensitive to tactics companies use to prey on the behaviors of other people who are still there. I gladly would have taken fewer presents at Christmas if it meant having more roasts instead of hot dogs. As a kindergartener, I was convinced there had to be a Santa Claus because even at that young age, I knew my parents couldn't afford all of the presents that were under the tree (turned out to be "Grandma-Claus" who bought the Atari system that year).

As I said, layaway isn't as bad as some of the other systems that prey on the poor. But let's not delude ourselves into thinking the modern layaway policies are a) anything like they used to be or b) great for the poor, particularly when it's mostly rolled out these days for holiday shopping instead of everyday necessities.
Mudpuppy
 
Posts: 2500
Joined: Sat Aug 27, 2011 3:26 am
Location: Sunny California

Re: Your take on layaway

Postby Abe » Sat Jul 27, 2013 5:41 pm

This may be a little off topic, but there have been some post here about buying at thrift stores. I bought an almost brand new suit at a local thrift store for $15.00. It fit me perfectly except the pants were a little too long. I got a seamstress to take up the pants for $10.00. I had just looked at an almost identical suit at a local retail store that cost $350.00. Actually the one I bought at the thrift store was a more expensive brand. A friend of ours, who is a clothes snob, commented on how nice the suit was. I told her where I got it. Later, my wife told me not to tell people I bought it at a thrift store. Personally, I don't see anything wrong with it. I buy lots of things at thrift stores. I have a fairly high net worth, but I still like a bargain.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby Abe » Sat Jul 27, 2013 5:54 pm

Mudpuppy wrote:
Abe wrote:The Cornell professor Louis Hyman who had the op-ed in the New York Times has got it all figured out. The only problem is he has never been there and done that. The fact of the matter is that layaway works for poor people. It's their only choice. Most stores don't even want to do it. It's a lot of trouble for them.

I have been there. I have done that. I can't count the number of hot dogs I ate as a kid because it was the cheapest meat my parents could buy and they only had a couple of bucks to last a week until payday. Or the number of government cheese blocks we had. Not to mention the MREs my father's reserve unit would let him bring home (although the old chocolate covered cookie bars were delicious). I think I ate more MRE crackers, peanut butter and cheese as snack when I was a kid than the "real" stuff.

So yeah, I have been there. And it makes me particularly sensitive to tactics companies use to prey on the behaviors of other people who are still there. I gladly would have taken fewer presents at Christmas if it meant having more roasts instead of hot dogs. As a kindergartener, I was convinced there had to be a Santa Claus because even at that young age, I knew my parents couldn't afford all of the presents that were under the tree (turned out to be "Grandma-Claus" who bought the Atari system that year).

As I said, layaway isn't as bad as some of the other systems that prey on the poor. But let's not delude ourselves into thinking the modern layaway policies are a) anything like they used to be or b) great for the poor, particularly when it's mostly rolled out these days for holiday shopping instead of everyday necessities.


Mudpuppy: I didn't say that you had not been there and done that. I was referring to the professor. But, I don't think most retailers are preying on the poor anymore than they are preying on anyone else. Layaway is a service offered. Walmart sells their layaway merchandise for the same price they sell otherwise. If the item goes on sale, they sell it for the sale price, and they match competitors prices, even on layaway. Yes, there is a fee if the customer uses the layaway service, but layaway service is a lot more trouble for the store. As I said in an earlier post, most stores don't even want to do layaway especially stores like Walmart.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby mojave » Sat Jul 27, 2013 6:04 pm

Just left Goodwill. Got three pairs of jeans, a sweater, two t-shirts and two nice tank tops. All name brands like Gap and Ann aTaylor Loft. All current styles a 20-something would wear, none show any wear. $42 with tax.
User avatar
mojave
 
Posts: 251
Joined: Mon Aug 20, 2012 9:59 am

Re: Your take on layaway

Postby Ged » Sat Jul 27, 2013 6:12 pm

My take on layaway is that it's about item number 79563 on the list of social injustices that low income folks have in their lives.

There really are much bigger issues.
Lack of planning on your part does not constitute an emergency on my part.
User avatar
Ged
 
Posts: 1684
Joined: Mon May 13, 2013 2:48 pm
Location: Roke

Re: Your take on layaway

Postby HelenaJustina » Sat Jul 27, 2013 7:06 pm

I'm a heavy thrifter, going a couple times a month. Beyond the odd business shirt or suit, I haven't bought my family new clothes in years. It requires a lot of thinking ahead to manage successfully. For example: school clothes and uniforms. Go to your local Goodwill now and it will be like looking for hen's teeth. All the good donations in that category will have come in right after Christmas and the end of the school year, with a little spike in March if you shop in a wealthier area. By now the selection will have been completely picked over by people like me and there won't be much left worth buying.

If you want winter clothes, you probably have until the end of August to get a good selection. The first cold snap, and all the casual shopper will flood through and clean the stores out, leaving very little until the weather warms up and people clean out their closets for spring.

I can do this because I am a stay at home mom, with enough storage space to hold on the things out of season and not-grown-into-yet. Dual income or single parent families may not have that luxury.
HelenaJustina
 
Posts: 86
Joined: Fri Nov 11, 2011 10:10 am

Re: Your take on layaway

Postby Ged » Sat Jul 27, 2013 11:24 pm

Abe wrote:
Ged wrote:My take on layaway is that it's about item number 79563 on the list of social injustices that low income folks have in their lives.

There really are much bigger issues.


How is layaway a social injustice. I just don't understand that.


It is a social injustice because it's a case of those less affluent paying fees that a more affluent person would not.

In the grand scheme of things it's a very minor example.
Lack of planning on your part does not constitute an emergency on my part.
User avatar
Ged
 
Posts: 1684
Joined: Mon May 13, 2013 2:48 pm
Location: Roke

Re: Your take on layaway

Postby M_to_the_G » Sun Jul 28, 2013 1:53 am

ResearchMed wrote:
M_to_the_G wrote:
Epsilon Delta wrote:“Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well- warmed, and well-fed.”
― Herman Melville


It sounds to me like he was referring to snobbery (criticism of clothing, speech, etc.). "The poor" also exhibit behavioral "habits," especially related to personal finances, that can and should be criticized by anyone with sense, well-fed or otherwise.


It's exceedingly difficult to believe the privileged and judgmental attitude in this comment.
Yes, "snobbery" indeed!

It seems absurd that anyone (or many anyones) "SHOULD be criticized", especially by anyone with an apparently self-declared sense of sense.
Who does M_to_the_G think will benefit from the mandatory criticism?
Do the these critics get a nice sense of self-satisfaction?

RM



It's wrong to criticize self-destructive financial behavior? Isn't that what we do on Bogleheads? And that's a good thing because it helps people in the end (even thought the "criticism," if that is the right word, pricks), not with a "privileged and judgmental attitude" as you say, but with facts, statistics, studies, and historical evidence. Read my first post if you can fish it out. I had a lot of very strange notions based on ignorance. I was heavily criticized and set strait. That's good. I'm better for it.
M_to_the_G
 
Posts: 178
Joined: Mon Jan 21, 2013 10:57 am

Re: Your take on layaway

Postby pennstater2005 » Sun Jul 28, 2013 7:45 am

My parents did layaway for Christmas when I was a kid. And my mom always paid it off without penalty. After awhile she stopped doing it and just saved her money throughout the year instead.
To hell with circumstances; I create opportunities. - Bruce Lee
User avatar
pennstater2005
 
Posts: 1181
Joined: Wed Apr 11, 2012 9:50 pm
Location: PA

Re: Your take on layaway

Postby SSSS » Sun Jul 28, 2013 8:38 am

livesoft wrote:When school starts and the kids need clothes and you got no money


Why would the kids suddenly need clothing just because school is starting? What (if anything) did they wear during the summer?
User avatar
SSSS
 
Posts: 1865
Joined: Fri Jun 18, 2010 12:50 pm

Re: Your take on layaway

Postby frugaltype » Sun Jul 28, 2013 9:27 am

SSSS wrote:
livesoft wrote:When school starts and the kids need clothes and you got no money


Why would the kids suddenly need clothing just because school is starting? What (if anything) did they wear during the summer?



This may have been more true years ago, but then kids ran around in the summer in shorts and t-shirts with holes in them. School meant presentable clothes - slacks, dresses, shoes.
User avatar
frugaltype
 
Posts: 1952
Joined: Wed Apr 24, 2013 10:07 am

Re: Your take on layaway

Postby ieee488 » Sun Jul 28, 2013 10:01 am

frugaltype wrote:
SSSS wrote:
livesoft wrote:When school starts and the kids need clothes and you got no money


Why would the kids suddenly need clothing just because school is starting? What (if anything) did they wear during the summer?



This may have been more true years ago, but then kids ran around in the summer in shorts and t-shirts with holes in them. School meant presentable clothes - slacks, dresses, shoes.


Not to mention children GROW as in clothing size.


The only thing I can't understand is the re-buying of school supplies every fall. When I was a kid whatever leftover notebooks, pens, pencils, etc was saved for next year.
ieee488
 
Posts: 1374
Joined: Thu Dec 10, 2009 9:57 am

Re: Your take on layaway

Postby BrooklynInvest » Sun Jul 28, 2013 10:31 am

Not sure I understand the concept. If Walmart keep the goods until I've paid the full amount, plus fees, then am I not lending Walmart MY money and paying them a fee to do so?

Wouldn't purchaser be better off putting the money under the mattress until they have the full amount? Actually, isn't the correct question, why isn't Walmart paying ME interest?
BrooklynInvest
 
Posts: 15
Joined: Sun Jul 28, 2013 10:23 am

Re: Your take on layaway

Postby Epsilon Delta » Sun Jul 28, 2013 10:36 am

ieee488 wrote:The only thing I can't understand is the re-buying of school supplies every fall. When I was a kid whatever leftover notebooks, pens, pencils, etc was saved for next year.

Some schools publish a detailed list of required school supplies. This changes from year to year and last years leftovers shall not pass.
User avatar
Epsilon Delta
 
Posts: 3263
Joined: Thu Apr 28, 2011 8:00 pm

Re: Your take on layaway

Postby SnapShots » Sun Jul 28, 2013 10:48 am

Oh! My Goodness... all this hype over layaway plans. Before people had credit cards, layaway's were common. Our big economic bust was due in part to people being overextended on credit cards and they stopped using them. Stores responded by bring back layaway programs.

Cheaper than putting the purchase on a credit card.

Recently, in Walmart, I heard a mother say to a pre-teen daughter who was wanting her to buy something, "I can't afford to buy that. I'm broke. I can't even afford to buy milk."

If you can't afford to buy milk, a layaway plan for a kid's coat might be helpful.

Fortunately, I've never been in a position I couldn't afford a gallon of milk.
the best decision many times is the hardest to do
User avatar
SnapShots
 
Posts: 906
Joined: Wed May 09, 2012 1:39 pm

Re: Your take on layaway

Postby jridger2011 » Sun Jul 28, 2013 11:12 am

I always thought layaway plans were free but the conditions were you must make payments periodically or they just refund your money and put the products back on the shelves. There is no harm in this type of program, some people with lesser means may not have checking or savings accounts to use to save money safely. I've heard of people cashing checks on payday and going off to pay bills immediately and also put some on layaway programs, whatever is left over is saved at home.
jridger2011
 
Posts: 234
Joined: Sun Feb 06, 2011 5:17 pm

Re: Your take on layaway

Postby SimonJester » Sun Jul 28, 2013 11:16 am

livesoft wrote:When school starts and the kids need clothes and you got no money, no checking account, no credit cards, then it might not be a bad idea. Also, the thrift stores in poorer neighborhoods don't have the same selection as thrift stores in 90210 and the like.



Ummm no, if you have no money then you should be shopping for clothes at the thrift stores! You can buy shirts, pants for kids for a dollar or two vs $15 and put it on layaway! :oops:
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
SimonJester
 
Posts: 412
Joined: Tue Aug 16, 2011 1:39 pm

Re: Your take on layaway

Postby Abe » Sun Jul 28, 2013 11:23 am

Ged wrote:
Abe wrote:
Ged wrote:My take on layaway is that it's about item number 79563 on the list of social injustices that low income folks have in their lives.

There really are much bigger issues.


How is layaway a social injustice. I just don't understand that.


It is a social injustice because it's a case of those less affluent paying fees that a more affluent person would not.

In the grand scheme of things it's a very minor example.


When businesses offer services, they base the price of those services on their cost to provide it. Walmart offers a layaway plan. Their cost to provide this service is higher than a normal transaction so they charge a small fee to cover their cost. I do not think they are charging a fee to take advantage of poor people. Walmart tried to discontinue layaway service because it was too much trouble and costly for them. They started back offering the service because of customer demand and some of their competitors were doing it. It is not a big money maker for them.

What about money orders. A lot of businesses, banks and the US Post Office sell money orders. They charge a fee for this service. A lot of poor people pay their bills with money orders because they don't have bank accounts. Is it a social injustice for them to charge a fee for this service? The fact that a lot of poor people use money orders is not the reason a fee is charged.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby Sam I Am » Sun Jul 28, 2013 11:43 am

SSSS wrote:
livesoft wrote:When school starts and the kids need clothes and you got no money


Why would the kids suddenly need clothing just because school is starting? What (if anything) did they wear during the summer?


In Florida during the summer it was shorts and a tee-shirt, if any shirt at all. Not acceptable school clothes when I attended school.

As well, kids grow sometimes a great deal, year to year, so shopping for schools clothes are kinda a thing most do.

Sam I Am
Sam I Am
 
Posts: 2063
Joined: Tue Feb 20, 2007 8:58 pm

Re: Your take on layaway

Postby Epsilon Delta » Sun Jul 28, 2013 11:46 am

Abe wrote:When businesses offer services, they base the price of those services on their cost to provide it.

This is not correct.

When a business offers a service they base the price on what the market will bear. The cost of providing the service only enters into it if the cost of the service is more than the market will bear, in which case the service is not offered.

The idea that the cost of the service matters comes from the idea of a competitive market. In a competitive market the price should move towards the cost of the second lowest cost provider. But this is only a theory. It does not apply in some case, where access to competition is restricted by structural or geographic issues, so that the second lowest cost provider is a high cost provider.
User avatar
Epsilon Delta
 
Posts: 3263
Joined: Thu Apr 28, 2011 8:00 pm

Re: Your take on layaway

Postby Abe » Sun Jul 28, 2013 12:17 pm

Epsilon Delta wrote:
Abe wrote:When businesses offer services, they base the price of those services on their cost to provide it.

This is not correct.

When a business offers a service they base the price on what the market will bear. The cost of providing the service only enters into it if the cost of the service is more than the market will bear, in which case the service is not offered.

The idea that the cost of the service matters comes from the idea of a competitive market. In a competitive market the price should move towards the cost of the second lowest cost provider. But this is only a theory. It does not apply in some case, where access to competition is restricted by structural or geographic issues, so that the second lowest cost provider is a high cost provider.


Are you saying that a businesses cost to provide a service has nothing to do with their pricing? I agree that if their cost exceeds what the market will bear they obviously have no incentive to offer the service.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby Epsilon Delta » Sun Jul 28, 2013 1:10 pm

Abe wrote:Are you saying that a businesses cost to provide a service has nothing to do with their pricing? I agree that if their cost exceeds what the market will bear they obviously have no incentive to offer the service.


Well, I'd replace nothing with little.

In other words:
My costs provide a floor on my pricing. My competitors pricing (and indirectly my competitors costs) provide a ceiling on my pricing. Since I'm interested on maximizing profit prices will be set nearer the ceiling than the floor, so it is my competitors costs that control my pricing. If I have no competitors the only thing that constrains my prices is not causing my customers to forgo my services altogether (In a sense the entire economy is my competitor.)
User avatar
Epsilon Delta
 
Posts: 3263
Joined: Thu Apr 28, 2011 8:00 pm

Re: Your take on layaway

Postby Jeanz » Sun Jul 28, 2013 1:43 pm

My experience with thrift stores is that long pants for boys over two or three just aren't available, nor are children's pajamas. Fortunately, when my children were young patches were in fashion, but I think that is no longer true. I haven't seen inexpensive fabric in years, either, and children still get teased or even bullied if they wear inappropriate clothing.

I'd do layaway for children's clothing if I had to.
Jeanz
 
Posts: 88
Joined: Wed Jul 28, 2010 1:58 pm

Re: Your take on layaway

Postby Abe » Sun Jul 28, 2013 2:08 pm

Epsilon Delta wrote:
Abe wrote:Are you saying that a businesses cost to provide a service has nothing to do with their pricing? I agree that if their cost exceeds what the market will bear they obviously have no incentive to offer the service.


Well, I'd replace nothing with little.

In other words:
My costs provide a floor on my pricing. My competitors pricing (and indirectly my competitors costs) provide a ceiling on my pricing. Since I'm interested on maximizing profit prices will be set nearer the ceiling than the floor, so it is my competitors costs that control my pricing. If I have no competitors the only thing that constrains my prices is not causing my customers to forgo my services altogether (In a sense the entire economy is my competitor.)


I have been in the retail business all my life. I have no formal education in business, marketing, etc, so my knowledge comes from experience only. In my business, I determine a selling price, or as you said the floor, based on my cost to provide the product or service. Now, if I can get more than that, the selling price will probably be higher. That is so obvious, that I didn't see any point in mentioning it initially. I think we are basically saying the same thing. Having said that, I have allowed myself to go off on a tangent. The point of my previous post was that I did not believe layaway service should be considered a social injustice.
Slow and steady wins the race.
User avatar
Abe
 
Posts: 704
Joined: Fri Sep 18, 2009 6:24 pm

Re: Your take on layaway

Postby LadyGeek » Sun Jul 28, 2013 3:22 pm

I removed a number of posts containing inappropriate comments regarding those with low income; there's no point to continue. This thread has run its course and is locked. See: Forum Policy

We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones... Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable.

Locked Topics

Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
LadyGeek
Site Admin
 
Posts: 17695
Joined: Sat Dec 20, 2008 6:34 pm
Location: Philadelphia


Return to Personal Consumer Issues

Who is online

Users browsing this forum: Don_Qua, gatorman, Google [Bot], Hector, Jake46, jsl11, SammyG and 53 guests